If you are subject to the minimum standby charge rules for personal use of a vehicle owned by a company and if the company vehicle is three or more years old, you may benefit by purchasing the vehicle from the company. Many new vehicles depreciate very quickly and if this has happened to your vehicle the cost to purchase it from the company could be quite low. The tax cost of the personal use of the vehicle is based on the original purchase price and can be very expensive. Buying the vehicle at the depreciated value will save the tax on the taxable benefit and may allow you to receive a non-taxable reimbursement from the company for business use. Remember that if you do not deal at arm’s length with the company, you must pay fair market value for the vehicle. However, you may still benefit from this tax plan.

Please contact your accountant at Harvey, Lister & Webb Incorporated to discuss the possibilities.

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